Hailstorms and cyclones a concern for Suncorp

While bushfires continue to wreak havoc in parts of NSW, Suncorp’s Patrick Snowball says brief but damaging hailstorms have one of biggest potentials for driving up expensive claims.
Photo: Michel O’Sullivan

Violent hailstorms and cyclones are two of
Suncorp Group
boss
Patrick Snowball
’s greatest worries as Queensland’s biggest insurer braces for natural disaster claims this summer.

While bush fires continue to wreak havoc in parts of NSW, Mr Snowball said that brief but damaging hailstorms had one of biggest potentials for driving up expensive claims.

“Undoubtedly the thing that is always front of mind is a hailstorm. We’ve had three or four since I’ve been to Australia. Two of them were in Melbourne – both 18 minutes, and both [costing] in excess of $250 million," Mr Snowball told The Australian Financial Review.

Hailstones, some of which were the size of cricket balls, hit Melbourne on Christmas Day in 2011. Insurers received thousands of claims and at least 10,000 vehicles were damaged in that event alone.

“They are very intense, they impact a very tight corridor with a lot of people in it [and] it’s a big issue to resolve those claims quickly," he said.

While hailstorms can deal hefty blows to an insurer’s balance sheet, Mr Snowball said sweeping cyclones that often attack parts of Queensland represented the biggest worry for Suncorp.

Last year, strong winds and widespread rain from ex-tropical cyclone Oswald damaged properties and prompted flooding in areas including Brisbane, Ipswich and the Gold Coast. The disaster yielded a damage bill of more than $2 billion.

“You have to be concerned about the big cyclones. [Oswald] was the biggest event, in terms of numbers of claims, that Suncorp had ever had because it was so widespread," Mr Snowball said.

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Company Profile

Suncorp is one of Australia’s biggest general insurers, which provides products such as home, contents and car insurance. The company owns brands such as AAMI and GIO.

Bushfire claims

Mr Snowball’s comments come as insurers, including rival Insurance Australia Group, continue to field claims from victims of the recent NSW bush fires.

Insurance companies had received 1041 claims from policyholders by Monday, with losses estimated at $145 million according to the Insurance Council of Australia.

More than 90 per cent of damaged and destroyed properties across the catastrophe regions of NSW have been assessed by insurers.

IAG-owned NRMA controls about 30 to 40 per cent market share of the policies written in the affected areas, including Springwood and the Blue Mountains.

IAG on Friday said it had received about 600 claims from the fires.

Despite boasting a smaller market share in NSW, Suncorp has not been spared the damage bill from the fires and is continuing to tally claims from customers.

Mr Snowball noted that bush fires were “very frightening", and the latest event demonstrated the need for proper insurance.

However, he argued that Australia had “very extensive experience" dealing with bush fires and many had learned the lessons from the tragic Black Saturday bush fires in Victoria four years ago, which killed more than 170 people.

“As long as the bush fires don’t get into the metropolitan cities, then the speed at which they move and the scale means that people can get out of the way," he said.